Economic Performance and Government Size In ECOWAS Countries

Abstract

This study investigated the impact of government size on economic growth and welfare in a non-linear model framework and subsequently determined the optimal size of government that promotes economic development in ECOWAS countries. Data covering the period 1986 to 2018 were employed and estimated using pooled ordinary least squares estimation techniques with heteroskedasticity consistent standard errors (HCSE). The study found that non-monotonic relationship exists between government size and economic development. The results also show that optimal level of government size for ECOWAS countries is about 22 percent and government size beyond this level is detrimental to economic growth and development. The study thus recommends that all ECOWAS countries, except Burkina Faso, may increase their government size since they are on the left side of the Armey curve.